-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, sa1Qog+YbkUco3fQp3GpgZarQ2OesP/E7U3pvp6ghB4Hnya5bSC03WojvooId20S ZQg4XnF9ztcLVuQWXB2gzA== 0000935069-95-000034.txt : 19950907 0000935069-95-000034.hdr.sgml : 19950907 ACCESSION NUMBER: 0000935069-95-000034 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19950630 FILED AS OF DATE: 19950829 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MARINER MUTUAL FUNDS TRUST CENTRAL INDEX KEY: 0000861106 STANDARD INDUSTRIAL CLASSIFICATION: 0000 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-06057 FILM NUMBER: 95568193 BUSINESS ADDRESS: STREET 1: 600 17TH STREET STREET 2: SUITE 1695 SOUTH CITY: DENVER STATE: CO ZIP: 80202 BUSINESS PHONE: 3036232577 MAIL ADDRESS: STREET 1: 600 17TH STREET STREET 2: SUITE 1605 SOUTH CITY: DENVER STATE: CO ZIP: 80202 N-30D 1 SEMI-ANNUAL REPORT FOR MARINER MUTUAL FUNDS TRUST MARINER MUTUAL FUNDS TRUST - - ------------------------------------------------------------------------------- SHORT-TERM FIXED INCOME FUND HSBC Asset Management [Logo] - - ------------------------------------------------------------------------------- SEMI-ANNUAL REPORT (UNAUDITED) June 30, 1995 Managed by: HSBC ASSET MANAGEMENT AMERICAS INC. Sponsored and distributed by: MARINER FUNDS SERVICES MARINER MUTUAL FUNDS TRUST SHORT-TERM FIXED INCOME FUND - - ------------------------------------------------------------------------------- Hsbc Asset Management [Logo] - - ------------------------------------------------------------------------------- July 21, 1995 Dear Shareholder: The fixed income market has enjoyed a significant rally in the first half of 1995. Interest rates have declined substantially from 1994 year end levels as GDP has slowed from the feverish pace experienced in the last quarter of 1994. Over the past six months there has been a shift in monetary policy. In February the Fed raised the Fed Fund rate to 6%. It turns out this was the last move in a year long tightening cycle which saw Fed Funds increase 3%. Since that move slower economic growth and a reduction of inflationary pressures allowed the Fed to adopt a more accomodative stance. On July 6 they lowered the Fed Funds rate by 25 basis points citing an absence of inflationary pressure. MANAGER'S DISCUSSION OF PERFORMANCE - - ------------------------------------------------------------------------------- Year to date the Fund has returned 7.06% versus 8.03% for the benchmark, the Lehman 1-5 Year Government/Corporate Index. While the returns are excellent on an absolute basis we are lagging the benchmark. This is due primarily to a poor first quarter when we were positioned defensively expecting higher interest rates and the market rallied. Second quarter performance was closer to benchmark and we fully expect to close the gap in the second half of the year. Sincerely, [GRAPHIC OMITTED] /s/W. Robert Alexander W. Robert Alexander PRESIDENT COMPARISON OF CHANGES IN VALUE OF $10,000 INVESTMENT IN SHORT-TERM FIXED INCOME FUND VS. LEHMAN 1-5 YEAR GOVERNMENT/CORPORATE INDEX Average Annual Total Return -------------------------------------- 1 Year Inception -------------------------------------- Offering Price(1) 5.92% 3.88% NAV(2) 8.12% 4.76% [GRAPHIC OMITTED] FUND(1) LEHMAN FUND(2) MAR 1993 10000 10000 10000 JUN 1993 9930 10195 10125 SEP 1993 10048 10372 10250 DEC 1993 10121 10421 10324 MAR 1994 10104 10300 10306 JUN 1994 10108 10269 10310 SEP 1995 10194 10362 10398 DEC 1995 10207 10346 10411 MAR 1995 10529 10746 10739 JUNE 1995 10927 11177 11146 Past performance is not predictive of future performance (1) Includes the maximum sales charge (2) Excludes the maximum sales charge The above illustration compares a $10,000 investment in the Short-Term Fixed Income Fund on March 1, 1993, to a $10,000 investment in the Lehman 1-5 Year Government/Corporate Index on that date. All dividends and capital gain distributions are reinvested. The performance takes into account all applicable fees and expenses. The Lehman 1-5 Year Government/Corporate Index is a widely accepted unmanaged index of overall treasury and government agency bond market performance and does not take into account charges, fees and other expenses. 2 BOARD OF TRUSTEES JOHN P. PFANN* CHAIRMAN OF THE BOARD; Chairman and President, JPP Equities, Inc. WOLFE J. FRANKL* Former Director, North America, Berlin Economic Development Corporation WILLIAM L. KUFTA Chief Investment Officer, Beacon Trust Company ROBERT A. ROBINSON* Trustee, Henrietta and B. Frederick H. Bugher Foundation *Member of the Audit and Nominating Committees - - ------------------------------------------------------------------------------- OFFICERS W. ROBERT ALEXANDER PRESIDENT STEVEN R. HOWARD SECRETARY MARK A. POUGNET VICE PRESIDENT AND TREASURER 3 [This page intentionally left blank.]
STATEMENT OF NET ASSETS AS OF JUNE 30, 1995 (UNAUDITED) SHORT-TERM FIXED INCOME FUND INTEREST MATURITY PRINCIPAL RATE DATE AMOUNT VALUE ------ -------- ---------- ------------ U.S. GOVERNMENT AND AGENCY OBLIGATIONS-75.5% U.S. GOVERNMENT OBLIGATIONS-72.1% Federal National Mortgage Association .................. 5.550% 02/12/99 $ 500,000 $ 490,544 ---------- State of Israel Agency for International Development ... 4.375 03/15/96 425,000 420,525 ---------- U.S. Treasury Notes: ................................... 8.500 11/15/95 140,000 141,356 ................................... 6.125 07/31/96 1,000,000 1,003,437 ................................... 6.750 06/30/99 1,000,000 1,026,875 ................................... 6.875 07/31/99 1,500,000 1,547,812 ................................... 7.750 01/31/00 1,500,000 1,603,125 ................................... 7.125 02/29/00 1,500,000 1,567,030 ................................... 6.250 05/31/00 1,500,000 1,516,875 ---------- 8,406,510 ---------- Total U.S. Government Obligations (Cost-$9,136,243) ............................................ 9,317,579 ---------- U.S. GOVERNMENT AGENCY MORTGAGE-BACKED SECURITIES-3.4% Federal National Mortgage Association Real Estate Mortgage Investment Conduits: 1991-G24K ............................................ 8.500 04/25/96 65,403 65,732 G34D ................................................. 7.250 10/25/96 174,456 175,105 1992-2OC ............................................. 7.500 01/25/97 193,719 195,064 ---------- Total U.S. Government Agency Mortgage-Backed Securities (Cost-$447,934) ................................................................... 435,901 ---------- Total U.S. Government and Agency Obligations (Cost-$9,584,177) 9,753,480 ---------- OTHER MORTGAGE-RELATED SECURITIES-4.4% General Motors Acceptance Corp. 1992-F Grantor Trust ................................. 4.500 09/15/97 50,300 49,964 FEDERAL HOME LOAN BANK .................................... 7.944 02/21/00 500,000 522,308 ---------- Total Other Mortgage-Related Securities (Cost-$570,817) ............................................... 572,272 ---------- CORPORATE BONDS-17.0% Banks-2.2% International Bank R&D ................................. 8.300 11/01/96 275,000 283,030 ----------
5
STATEMENT OF NET ASSETS AS OF JUNE 30, 1995 (CONTINUED) SHORT-TERM FIXED INCOME FUND INTEREST MATURITY PRINCIPAL RATE DATE AMOUNT VALUE ------ -------- ---------- ------------ CORPORATE BONDS-(continued) Finance-3.1% General Motors Acceptance Corp. ...................... 7.400% 01/14/97 $ 400,000 $ 405,944 ----------- Financial Services-1.9% Associates Corp. of North America .................... 6.875 01/15/97 240,000 242,320 ----------- Insurance-5.8% International Lease Finance Corp. .................... 4.875 09/15/95 750,000 748,144 ----------- Tobacco-4.0% Phillip Morris Cos., Inc. ............................ 8.875 07/01/96 500,000 512,320 ----------- Total Corporate Bonds (Cost-$2,286,177) ................................................................. 2,191,758 ----------- SHORT-TERM INVESTMENTS-1.2% Goldman ILA Federal Portfolio (Cost--$162,000) ............ 5.750 On Demand 162,000 162,000 ----------- TOTAL INVESTMENTS-98.1% (Cost--$12,603,171)* ................................................................................. 12,679,510 ----------- OTHER ASSETS (LIABILITIES)-1.9% Cash .................................................................................................... 573 Interest and dividends receivable ....................................................................... 285,474 Other assets ............................................................................................ 1,140 Organizational costs, net ............................................................................... 28,452 Accrued expenses ........................................................................................ (10,830) Dividends payable ....................................................................................... (55,949) Due to affiliates ....................................................................................... (5,227) ----------- Other assets in excess of liabilities-net .......................................................... 243,633 ----------- NET ASSETS-100% ......................................................................................... $12,923,143 =========== NET ASSET VALUE PER SHARE-applicable to 1,307,615 shares ($0.001 par value) outstanding ..................................................................... $9.88 ===== * Also cost for Federal income tax purposes. As of June 30, 1995, net unrealized appreciation for Federal income tax purposes aggregated $76,339, of which $226,292 and $149,953 related to appreciated and depreciated securities, respectively.
See Notes to Financial Statements. 6
STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1995 (UNAUDITED) SHORT-TERM FIXED INCOME FUND INVESTMENT INCOME: Income: Interest ....................................... $ 428,030 Dividends ...................................... 16,738 --------- 444,768 --------- Expenses: Advisory fees .................................. 37,268 Audit fee ...................................... 12,320 Legal fees ..................................... 7,370 Administrative services fee .................... 6,740 Amortization of organizational costs ........... 6,137 Distribution expenses .......................... 5,157 Co-administrative and shareholder servicing fees 4,743 Trustees' fees and expenses .................... 3,432 Custodian fee .................................. 1,267 Miscellaneous expenses ......................... 2,356 --------- Total expenses ............................. 86,790 LESS EXPENSE WAIVERS/REIMBURSEMENTS ................... (26,501) --------- Net expenses ............................... 60,289 --------- Net investment income .......................... 384,479 --------- NET REALIZED LOSS AND UNREALIZED GAIN ON INVESTMENTS: Net realized loss on investments ................... (37,146) Net change in unrealized appreciation on investments 589,318 --------- Net gain on investments ............................ 552,172 --------- Net increase in net assets resulting from operations $ 936,651 =========
See Notes to Financial Statements. 7
STATEMENT OF CHANGES IN NET ASSETS (UNAUDITED) SHORT-TERM FIXED INCOME FUND For the Six Months ended For the June 30, 1995 Year ended (Unaudited) December 31, 1994 --------------- ----------------- OPERATIONS: Net investment income ............................................ $ 384,479 $ 926,567 Net realized loss on investments ................................. (37,146) (383,911) Net change in unrealized appreciation(depreciation) on investments 589,318 (389,230) ------------ ------------ Net increase in net assets resulting from operations .......... 936,651 153,426 ------------ ------------ DISTRIBUTIONS TO SHAREHOLDERS FROM: Net investment income ............................................ (384,479) (926,567) ------------ ------------ CAPITAL SHARE TRANSACTIONS: Proceeds from sales of 77,404 and 407,880 shares, respectively ... 741,794 3,977,439 Net asset value of 1,390 and 6,674 shares issued in reinvestment of distributions, respectively ................................ 13,491 64,701 Payments for redemptions of 313,606 and 638,947 shares, respectively (3,026,074) (6,138,444) ------------ ------------ Net decrease in net assets from capital share transactions ..... (2,270,789) (2,096,304) ------------ ------------ Total decrease in net assets ....................................... (1,718,617) (2,869,445) ------------ ------------ NET ASSETS: Beginning of period .............................................. 14,641,760 17,511,205 ------------ ------------ End of period .................................................... $ 12,923,143 $ 14,641,760 ============ ============
See Notes to Financial Statements. 8 NOTES TO FINANCIAL STATEMENTS (UNAUDITED) 1. SIGNIFICANT ACCOUNTING POLICIES Mariner Short-Term Fixed Income Fund (the "Fund") is an investment portfolio of Mariner Mutual Funds Trust (the "Trust"). The Trust is a Massachusetts business trust and is an open-end, diversified investment company with multiple investment portfolios, including the Fund. SECURITIES VALUATION: Portfolio securities for which market quotations are readily available are valued at the quoted bid price. Securities for which market quotations are not readily available are valued at fair value as determined in good faith by or under the supervision of the Trust's officers in accordance with guidelines which have been adopted by the Board of Trustees. Such procedures include the use of independent pricing services which use prices based on yields or prices of securities of comparable quality, coupon, maturity and type, indicators as to value from dealers and general market conditions. Short-term obligations having a maturity of 60 days or less are valued at amortized cost which approximates market value. TAXES: It is the Fund's policy to comply with the provisions of the Internal Revenue Code, as amended, applicable to regulated investment companies, and to distribute substantially all of its taxable income and net realized capital gains to its shareholders for each taxable year. Therefore, no provision is required for Federal income tax. The Fund has available a $423,001 capital loss carryforward which, if not utilized, $39,090 will expire in the year 2001 and $383,911 will expire in the year 2002. DIVIDENDS AND DISTRIBUTIONS: The Fund intends to declare as a dividend substantially all of its net investment income at the end of each business day and to pay within five business days after the end of each month. Net capital gains, if any, will be distributed annually. SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Security transactions are recorded on the trade date. Identified cost of investments sold is used for both financial statement and Federal income tax purposes. Interest income is recorded as earned. EXPENSE ALLOCATION: Expenses directly attributed to each Fund in the Trust are charged to that Fund's operations; expenses which are applicable to all Funds are allocated among them. ORGANIZATIONAL COSTS: Costs incurred in connection with the organization of the Fund are being amortized on a straight-line basis over a five-year period from the date operations commenced. 2. CAPITAL The Trust is authorized to issue an unlimited number of shares of beneficial interest each with a par value of $0.001 per share. At June 30, 1995, the composition of net assets of the Fund was as follows: Paid-in capital ............................ $ 13,306,951 Accumulated net realized loss on investments (460,147) Net unrealized appreciation on investments . 76,339 ------------ Total net assets ......................... $ 12,923,143 ============ 9 NOTES TO FINANCIAL STATEMENTS (CONTINUED) 3. PORTFOLIO SECURITIES The cost of securities purchased and proceeds from securities sold (excluding short-term securities and principal paydowns) for the six months ended June 30, 1995 were approximately $5,079,000 and $1,648,000, respectively. 4. AGREEMENTS The Trust retains HSBC Asset Management Americas Inc. ("HSBC Americas") to act as Investment Adviser for the Fund. HSBC Americas is the North American investment affiliate of HSBC Holdings plc (Hong Kong and Shanghai Banking Corporation). As Investment Adviser, HSBC Americas furnishes investment guidance and policy direction in connection with the management of the portfolio of the Fund, subject to policies established by the Board of Trustees. As compensation for its services, HSBC Americas is paid monthly advisory fees at the following annual rates: Advisory Portion of the Fund's average daily net assets Fee Rate -------------------------------------------------------- -------- Not exceeding $400 million ............................. 0.550% In excess of $400 million but not exceeding $800 million 0.505% In excess of $800 million but not exceeding $1.2 billion 0.460% In excess of $1.2 billion but not exceeding $1.6 billion 0.415% In excess of $1.6 billion but not exceeding $2 billion . 0.370% In excess of $2 billion ................................ 0.315% For the six months ended June 30, 1995, HSBC Americas earned approximately $13,600 in advisory fees, net of fee waivers of approximately $23,700. As Administrator, PFPC Inc. ("PFPC") is paid a monthly asset based fee of 0.10% of the Fund's first $200 million of average net assets; 0.075% of the Fund's next $200 million of average net assets; 0.05% of the Fund's next $200 million of average net assets; and 0.03% of the Fund's average net assets in excess of $600 million; exclusive of out-of-pocket expenses. PFPC has agreed to waive 10% and 5% of its fee during the first and second year of its administration, respectively. For the six months ended June 30, 1995, PFPC earned approximately $6,100, net of fee waivers of approximately $600, in administrative fees. HSBC Americas may enter into agreements (the "Service Agreements") with certain banks, financial institutions and corporations ("Service Organizations") whereby each Service Organization handles recordkeeping and provides certain administrative services for its customers who invest in the Fund through accounts maintained at that Service Organization. Each Service Organization will receive monthly payments, which are based upon expenses that the Service Organization has incurred in the performance of its services under the Service Agreement. The payments from the Fund on an annual basis will not exceed 0.25% of the average value of the Fund's shares held in the subaccounts of the Service Organizations. 10 NOTES TO FINANCIAL STATEMENTS (CONTINUED) Marine Midland Bank, N.A. ("Marine Midland"), an affiliate of the Adviser, serves as custodian for the Fund. For furnishing custodian services, Marine Midland is paid a monthly fee with respect to the Fund for safekeeping its assets plus certain transaction charges and out-of-pocket expenses. For the six months ended June 30, 1995, HSBC Americas paid the Fund's entire custodian fees totaling approximately $1,300. HSBC Americas earned co-administration and shareholder servicing fees of 0.03% and 0.04% of the Fund's average net assets, respectively, totaling approximately $4,700. Of that total, HSBC Americas waived approximately $900 of these fees for the month of January 1995. The Fund has adopted a Distribution Plan and Agreement (the "Plan") pursuant to Rule 12b-1 of the Investment Company Act of 1940, as amended. The Plan provides for a monthly payment by the Fund to Mariner Funds Services for expenses incurred in connection with distribution services provided to the Fund not to exceed an annual rate of 0.35% of the average daily value of the Fund's net assets during the preceding month. One state in which the shares of the Fund are qualified for sale imposes limitations on the expenses of the Fund. The Advisory Contract and the Administrative Services Contract with HSBC Americas provide that if, in any fiscal year, the total expenses of the Fund (excluding taxes, interest, distribution expenses, brokerage commissions and other portfolio transaction expenses, other expenditures which are capitalized in accordance with generally accepted accounting principles and extraordinary expenses, but including the advisory and administrative services fees) exceed the expense limitation applicable to the Fund imposed by the securities regulations of such state, HSBC Americas will pay or reimburse the Fund in amounts equal to the excess. Although there is no certainty that this limitation will be in effect in the future, the effective limitation on an annual basis with respect to the Fund is currently 2.5% per annum of the first $30 million of average net assets, 2.0% of the next $70 million of average net assets and 1.5% of average net assets in excess of $100 million. For the six months ended June 30, 1995, there were no payments or reimbursements required as a result of this expense limitation. A partner of Baker & McKenzie, legal counsel to the Trust, serves as Secretary of the Trust. For the six months ended June 30, 1995, the Fund paid legal fees of approximately $9,300 to Fund counsel. 11
FINANCIAL HIGHLIGHTS SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD SHORT-TERM FIXED INCOME FUND FOR THE PERIOD FOR THE MARCH 1, 1993 SIX MONTHS ENDED FOR THE (COMMENCEMENT OF JUNE 30, 1995 YEAR ENDED OPERATIONS) TO (UNAUDITED) DECEMBER 31, 1994 DECEMBER 31, 1993 --------------- ----------------- ----------------- Net asset value, beginning of period ............................ $ 9.49 $ 9.91 $ 10.00 ---------- ---------- ---------- Income From Investment Operations Net investment income ...................................... 0.27 0.50 0.41 Net realized and unrealized gain(loss) on investments ...... 0.39 (0.42) (0.09) ---------- ---------- ---------- Total from investment operations ........................... 0.66 0.08 0.32 ---------- ---------- ---------- Less Distributions from: Net investment income ...................................... (0.27) (0.50) (0.41) ---------- ---------- ---------- Net asset value, end of period .................................. $ 9.88 $ 9.49 $ 9.91 ========== ========== ========== Total return (a) ................................................ 7.06%(b) 0.86% 3.24%(b) Ratios/Supplemental Data Net assets (000), end of period ............................ $ 12,923 $ 14,642 $ 17,511 Ratio of expenses(net of fee waivers) to average net assets* 0.89%(c) 0.78% 0.60%(c) Ratio of net investment income(net of fee waivers) to average net assets* ................................... 5.65%(c) 5.18% 4.91%(c) Portfolio turnover rate .................................... 15.39%(b) 68.13% 32.02%(b) - - ------------- (a) Excludes sales charge. (b) Not annualized. (c) Annualized. * The ratios of net investment income and expenses to average net assets for the six months ended June 30, 1995 reflect a decrease of 0.22 % or $0.02 per share (1994--0.43% or $0.01) and (1993--0.69% or $0.01) due to fee waivers.
See Notes to Financial Statements. 12 =============================================================================== MARINERSM MUTUAL FUNDS TRUST 370 17th Street, Suite 2700 Denver, Colorado 80202 GENERAL INFORMATION: (800) 753-4462 INVESTMENT ADVISER AND CO-ADMINISTRATOR HSBC Asset Management Americas Inc. 250 Park Avenue New York, New York 10177 SPONSOR AND DISTRIBUTOR Marinersm Funds Services 370 17Th Street, Suite 2700 Denver, Colorado 80202 ADMINISTRATOR, TRANSFER AND DIVIDEND DISBURSING AGENT PFPC, Inc. 400 Bellevue Parkway Wilmington, Delaware 19809 CUSTODIAN Marine Midland Bank, N.A. 140 Broadway New York, New York 10015 LEGAL COUNSEL Baker & McKenzie 805 Third Avenue New York, New York 10022 INDEPENDENT AUDITORS Ernst & Young LLP 787 Seventh Avenue New York, New York 10019 This report is for the information of the shareholders of Mariner Mutual Funds Trust. Its use in connection with any offering of the Trust's shares is authorized only in the case of a concurrent or prior delivery of the Trust's current prospectus. =============================================================================== -----END PRIVACY-ENHANCED MESSAGE-----